The social gaming giant is about to go public with its operation.
Zynga is already worth an estimated $10 billion, but that number could skyrocket if recent reports are to be believed. The Wall Street Journal says that the company is preparing to make an initial public offering (IPO) as early as this week, and if the recent IPO of LinkedIn is any indication, demand for the stock could double the valuation of the studio.
While I won’t even pretend that I know anything about investing – I’ll believe the analysts when they say that an IPO boosts the profile of a company – I would be a bit wary when it comes to Zynga. Loath as I am to agree with Denis Dyack, he’s right when he says that the iOS market is currently flooded with apps that aren’t making any money and the crash of the latest Internet bubble almost seems inevitable.
Then again, Zynga appears to have a far more stable business model than other Internet start-ups (or game developers). Since rising to prominence with FarmVille, the company has branched out with licensing deals with the likes of Lady Gaga and Kung Fu Panda 2, and now has more than 1,500 employees spread across six offices. Last year alone, the studio pulled in about $400 million in profit, so even if the app market collapses, there’s a good chance that Zynga will be one of the few survivors.
Goldman Sachs is expected to be amongst the lead bankers for the Zynga offering.
Source: Wall Street Journal